4 - FIFA/CIES International University Network

DEAL OF
THE MONTH
KEVIN McCULLAGH
Senior Reporter, TV Sports Markets
The Nimbus Communications agency,
holder of the worldwide media rights for
international cricket in India, agreed a
carriage deal with US cable-television
operator Comcast for new cricket
channel Neo Cricket.
PAY-TV MUST UP ITS GAME
Christian Seifert, chief executive of the Deutsche Fussball Liga, told
TV Sports Markets in an exclusive interview in July that Germany’s weak
pay-television market was the biggest challenge facing the Bundesliga.
GERMANY, Europe’s largest television market,
must develop a genuine pay-television culture
if its top football league, the Bundesliga, is to
match the broadcast revenue-generating power
of Europe’s other top leagues, the league said the
week ending Friday July 2.
The league will also need the national
cartel authority, the Bundeskartellamt, to relax
its restrictions on the league’s collective sale of
rights, if it is to have a chance of realising its
media value.
Speaking exclusively to TV Sports Markets,
Christian Seifert said that the weak German
pay-television market was the single greatest
challenge facing the league.
“This is the biggest challenge - whether it
will be possible to strengthen the pay-television
culture. The growth rate on our international
sales has been good, but this has not been
reflected in our domestic sales,” he said.
International sales for the present cycle will
reach almost three times what was generated in
the previous deal. Domestic broadcast fees, in
contrast, rose less than two per cent - and the
DFL won praise even for that.
Seifert said the onus was on German paytelevision
operators to create products that
challenged the strong free-to-air operators in
the market: “There is potential for growth for
our broadcast revenues. But it is related to the
ability of pay-television providers to address the
German customer. Pay-television has a chance to
grow as long as it offers a product which reflects
the specific needs of the German market.”
Pay-television penetration in Germany is at
Christian Seifert - Getty Images Sport
only 12 per cent, about a quarter of that in the
UK and Italy and half that in Spain and France.
That is partly a reflection of the strength of the
German free-to-air market, which is a powerful
brake on pay-television growth, but also on the
past mistakes and failures of Germany’s leading
pay-television broadcaster, Sky Deutschland,
formerly Premiere. Losing the Bundesliga rights
to cable operator Unity Media’s Arena operation
in the 2006-07 season set back Sky’s growth by
at least two years.
The DFL is hoping for a more benign
regulatory environment for the next round of
sales. Last time it was forced to ditch a
500 million per season, six-year deal with media
mogul Leo Kirch that hinged on increasing the
value of pay-television rights by pushing back
the Saturday night free-to-air highlights from
6.30pm to 10pm, similar to the English Premier
League model. To the astonishment of competition
lawyers, the cartel authority insisted on an early
evening free-to-air highlights programme.
“The last process was very much influenced
by the fact that we had the obligation to show the
free-to-air highlights programme before 8pm on
Saturday”, said Seifert. “When it was clear that
was fixed, there was only very limited competition
on the most important live packages.”
Seifert said that the league and its broadcasters
were pleased with the new structure of Bundesliga
coverage last season, the first of a new four-year
cycle. New live match and highlights programme
slots helped drive up revenues and have delivered
good increases in total audiences for the
Bundesliga on both pay-television and free-to-air.
A cricket channel in the US? Where is
the demand?
The channel will cater mostly for the
South-Asian expatriate population in the
US. It will be included in pay-television
channel bundles created specifically for
this demographic. Nimbus is aiming to
start with 200,000 to 250,000 subscribers,
rising to around 500,000 after one year.
There is demand for the channel from
US pay-television companies - as well as
the deal with Comcast, deals are in the
pipeline with Time Warner, Cabelvision,
Cox, Echostar and DirecTV.
Why launch a channel? Why not just sell
the rights to a US-based broadcaster?
Nimbus sold the rights to satellite
broadcaster Echostar in the previous fouryear
cycle, 2006 to 2010, in a deal worth
over $50 million. However demand for
cricket content from US broadcasters has
flat-lined since then. Competition between
Echostar and DirecTV for control of the
South Asian ex-pat market has faded, and
the value of the rights was undermined by
rampant internet piracy. Nimbus thinks
that launching Neo Cricket will be more
lucrative than selling the rights, but it
arguably had no other option.
Nimbus is also considering launching
a UK channel, targeting around 200,000
subscribers to South-Asian pay-television
channel bouquets there. As in the US,
Nimbus may be able to earn more from a
channel than from selling the rights.
What are the US channel’s prospects
for success?
Nimbus’s subscriber targets are
considered ambitious. Echostar showed
the Indian cricket rights on South Asian
sports channel Zee Sports America last
time. The channel attracted around 100,000
subscribers. Potential barriers to growth
include competition from Willow TV, which
has the rights for World Cup cricket and
the Indian Premier League. Also, Nimbus
only has non-exclusive broadband rights
for Indian cricket, meaning the Board of
Control for Cricket in India could also sell
these to another US broadcaster, or even
exploit them itself.
SportBusiness International • No.160 • 09.10 21